The NBA Dribbles Toward Armageddon
by James Elmendorf on
Smug as they come: NBA Commissioner David Stern.
Basketball Armageddon is here, and it now appears the NBA season is in jeopardy. (“Nuclear Winter” is the preferred term of art, but I’d rather invoke our recent local freeway experience in hopes that the disaster is overrated.)
My wife, who represents food service workers at Staples Center, is pretty bummed, but my son’s fine, having moved on from Kobe to Anze Kopitar and Jonathan Quick (it’s hockey, people; check it out).
For a timeline of how we got here, check out this.
The essence of the dispute is this. The NBA says it is losing money overall, but won’t open its books. (Malcom Gladwell makes some useful points on a broad question here). No matter, because the players have agreed to reduce their cut of the pie by seven percent, more than the $300 million the league says it is losing.
The real issue, however, is evident here. The charts indicate that some teams are losing money, while others have a license to print it. Given that scenario, the league has two choices—reduce the player cut to allow the smallest markets to make money, or negotiate revenue-sharing deals among themselves to ensure everyone makes money.
Yesterday the players union opted to disclaim interest in representing the workers in the union, a move that allows them to file an anti-trust lawsuit. Economist Andrew Zimbalist explains the issue here, but really this is pretty straight-forward. By negotiating with a union, the league can set wages collectively, among other things, a practice that would not be available to, say, the various large retailers. Without a union, the cooperation between the competing teams is, at least theoretically, a violation of anti-trust laws.
League commissioner David Stern reacted to the news here, and if listening to him doesn’t make you support the players, you should examine your critical faculties. He’s as smug as they come, and it’s a good reminder that the bosses tend to help organize the workers simply by being themselves.
There are numerous stories indicating the union’s not been operating at peak effectiveness either, one example of which can be found here. This profile of union leader Billy Hunter says to me there may be some truth to the criticism. The history of union leaders in sports (here, here, and here) hasn’t always been the best, but perhaps we can draw on better inspiration here and here (Hunter could find it by joining us here).
